IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF MARCH 2019 BEFORE THE HON’BLE MR. JUSTICE ALOK ARADHE WRIT PETITION NO.6603 OF 2019 (GM-RES) BETWEEN:
M/S. BAHWAN CYBER TEK PVT. LTD. REPRESENTED BY ITS DIRECTOR, MR. V. M. MURALIDHARAN, 148, RAJIV GANDHI SALAI (OMR), OKKIYAM, THORAIPAKKAM, CHENNAI-600 097, REPRESENTED BY ITS DIRECTOR, MR. V. M. MURALIDHARAN.
(BY MR.DHYAN CHINNAPPA, SENIOR ADV. A/W MS.RAMYA S, ADV.) AND:
1. GENERAL MANAGER … PETITIONER CREDIT MONITORING AND REVIEW DEPARTMENT, SYNDICATE BANK, CORPORATE OFFICE, 2ND FLOOR, GANDHINAGAR, BENGALURU-560 009.
2. THE DIRECTOR E-PROCUREMENT TECHNOLOGIES LIMITED, B 705, WALL STREET-II, OPP-ORIENT CLUB, NR. GUJARAT COLLEGE, ELLIS BRIDGE, AHMEDABAD-380 006, GUJARAT, INDIA.
… RESPONDENTS (BY MR.ASHOK HARANAHALLI, SENIOR ADV. FOR MR.SUBRAMANYA R. ADV. FOR R1 MR.MANMOHAN P.N., ADV.FOR R2) - - -
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO DECLARE THAT THE AUCTION PROCESS CONDUCTED BY THE R-1 ON 31.1.2019 PURSUANT TO THE REQUEST FOR PROPOSALS IS ARBITRARY, UNJUST, ILLAGAL AND AGAINST THE EXPRESS PROCEDURE PRESCRIBED BY THE RFP DTD:10.12.2018 [ANENXURE-A] THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER Mr.Dhyan Chinnappa, learned senior counsel along with Ms.Ramya S, learned counsel for the petitioner.
Mr.Ashok Haranahalli, learned Senior counsel for Mr.Subramanya R. learned counsel for respondent No.1.
Mr.Manmohan P.N., learned counsel for respondent No.2.
2. The writ petition is admitted for hearing.
With consent of the learned counsel for parties, the same is heard finally.
3. In this petition under Article 226 & 227 of Constitution of India, the petitioner inter alia seeks a declaration that the auction process conducted by respondent No.1 on 31.01.2019 in pursuance of Request for Proposals is arbitrary, unjust illegal and against the procedure prescribed by the request of proposals dated 10.12.2018. The petitioner also seeks a writ of mandamus directing respondent No.1 to re-conduct the auction in accordance with law and strictly adhere to the procedure in the Request For Proposals dated 10.12.2018. In order to appreciate the grievance of the petitioner, few facts need mention, which are stated infra:
The respondent No.1 is a Bank constituted and established under Section 3 of the Banking Companies (Acquisition And Transfer Of Undertakings) Act, 1970. The Reserve Bank of India directed all the Banks in the country to adopt and implement a system of early warning signals for monitoring large loan accounts for any unusual signs, frauds and probable loan default etc. The early warning signals is a software solution, which is developed exclusively to monitor large loan accounts. The Reserve Bank of India constantly issued instructions and directions for adaptation and implementation of Hi- Tech software system by the Banks. The aforesaid system was to be procured in the Banks and to be implemented in the existing banking software for synchronizing the same with the Bank’s core banking system. The respondent No.1-Bank issued a Notification dated 10.12.2018 inviting e-tenders for submission of e- request of proposal for procurement of early warning signal software system.
4. As per the Notification, the last date for seeking pre-bid clarification/queries through emails was fixed on 17.12.2018 and a pre-bid meeting was scheduled for 19.12.2018. The pre-bid meeting was held on 19.12.2018, in which the representative of the petitioner participated. The last date for submission of bid through online was 09.01.2019. The bidders were permitted to submit the documents through offline mode upto 11.01.2019 and Earnest Money Deposit to the tune of Rs.15 Lakhs was to be furnished in the form of Bank Guarantee along with request for proposal. During the pre-bid meeting, some prospective bidders requested for extension of time for submitting the online bids, which was extended upto 18.01.2019. The bids were opened on 21.01.2019 and in all, three companies including the petitioner participated in the tender proceeding and submitted their bids upto 21.01.2019.
5. After preliminary scrutiny, the bidders were called to make technical presentation on 31.01.2019 for workability of early warning signals software. The bidders including the petitioner were also informed on 30.01.2019 that reverse auction process shall be held on 31.01.2019 at 4.30 p.m. in the event they are declared successful in technical responsiveness. The petitioner as well as on Price Water House Coopers was allowed to participate in the online reverse auction process, which is a mechanism for submission of financial bids by the eligible companies in decrement value.
6. The respondent No.1 availed of services of one M/s E-Procurement Technologies as facilitator for conducting auction process. The reverse auction was held on 31.01.2019, in which bid of one M/s Price Water House Coopers Pvt. Ltd., was found to be the lowest for an amount of Rs.3.90 Crores. The bidding time came to an end at 5.30 p.m. Accordingly, the aforesaid company was declared as successful bidder. Thereafter the petitioner sent an email at about 9.21 p.m. on 31.01.2019, in which a complaint was made about software glitches and called for re-conducting the reverse auction process. Thereafter, again on 01.02.2019 details of latest glitches and issues were furnished to respondent No.1 and request was made to re-conduct the e-auction process. However, the communications of the petitioner failed to evoke any response. In the aforesaid factual background, the petitioner has approached this Court.
7. Learned Senior Counsel for the petitioner submitted that the petitioner was not given sufficient time to participate in the online reverse auction and as per Clause 4 of the Request for Proposals document, the petitioner ought to have given atleast one or two days time prior to reverse auction date. However, in the instant case, the petitioner on 31.01.2019 itself was informed that it has to participate in the reverse auction process, if its declared as successful bidder. It is also submitted that on account of technical glitches, the petitioner was prevented from submitting a bid for Rs.3.70 Lakhs. It is further submitted that the terms and conditions contained in the Request of Proposal documents are equally binding on the respondents and the very purpose of issuing rules/instructions is to ensure their enforcement and any deviation from the rules/instructions would impair the rule of transparency and fairness. It is also submitted that petitioner is ready to perform the work in question for a sum of Rs.3.50 Crores. In support of aforesaid submissions, reference has been made to the decision of the Supreme Court in ‘INDIAN RAILWAY CATERING AND TOURISM CORPORATION LIMITED AND ANOITHER VS. DOSHION VEOLIA WATER SOLUTIONS PRIVATE LIMITED AND OTHERS’, (2010) 13 SCC 364.
8. On the other hand, Learned Senior Counsel for respondent No.1 has submitted that the entire process of e-tender has been transparent and fair and on 30.01.2019 i.e., a day prior to reverse auction which was scheduled on 31.01.2019, on which respondent No.1 had communicated to all bidders through email that reverse auction process will be held on 31.01.2019 at 4.30 p.m. if their bids are found to be technically responsive. The petitioner participated in the process of reverse auction without any demur. It is further submitted that the petitioner participated in the mock auction and have actively participated in the reverse auction and therefore, the contention of the petitioner it could not get acclimatized with the system behavior is sans substance. It is also argued that the offer made by the petitioner cannot be accepted at this stage as the entire process is complete. In support of his submissions, reference has been made to the decision of the Supreme Court in ‘ASHOK KUMAR AND ANOTHER VS. STATE OF BIHAR AND OTHERS’, (2017) 4 SCC 357, ‘CENTRAL COALFIELDS LIMITED AND ANOTHER VS. SLL-SML (JOINT VENTURE CONSORTIUM) AND OTHERS’, (2016) 8 SCC 622 and ‘RAUNAQ INTERNATIONAL LTD. VS.
I.V.R. CONSTRUCTION LTD. AND OTHERS’, (1999) 1 SCC 492.
9. I have considered the submissions made by learned counsel on both the sides and have perused the record. Admittedly, all the bidders including the petitioner were informed through email on 30.01.2019 at about 5.46 p.m. that reverse auction process will be conducted on 31.01.2019 at 4.00 p.m. The petitioner vide its communication dated 31.01.2019 sent at 10.52 a.m. communicated to respondent No.1 Bank that it will participate in the reverse auction process and disclose the name of its authorized representative. The petitioner company also participated in the mock auction through the facility provided by respondent No.2. The petitioner also sent an email to respondent No.2 on 31.01.2019 at 15.41 p.m. and confirmed that it has received the demo/mock auction. The petitioner thereafter, participated in the reverse auction process actively. Before participation in the reverse auction process, no objection at any point of time was raised by the petitioner. The time for reverse auction process was initially from 4.00 p.m. to 5.00 p.m. However, the same was extended upto 5.30 p.m., which was duly communicated to the bidders including the petitioner.
The petitioner had submitted a bid of Rs.3.90 Crores at 5.29 p.m. whereas, the successful bidders submitted a bid of Rs.3.80 Crores one second prior to 5.30 p.m. and therefore, the bid of Price Water House Coopers is accepted and he was declared as successful bidder. It is pertinent to mention that all the bidders were given the same time to participate in the reverse auction process. Even though, there has been a deviation from time limit mentioned in Clause 4 of the Request for Proposals, however, all the bidders were given the same time to participate in the reverse auction and the petitioner admittedly participated in the reverse auction. Therefore, he cannot be permitted to complaint about the technical glitches subsequently. If the petitioner had any grievance, it was open for him to raise an objection at an appropriate stage i.e., before participating in the reverse auction or in any case, the petitioner could have participated in the reverse auction process subject to objections. The process e-tender process adopted by respondent No.1 does not suffer from any infirmity warranting interference of this Court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution of India. Therefore, no interference in exercise of powers under Article 226 of the Constitution of India is called for in the fact situation of the case. So far as the offer made by the petitioner that he is ready and willing to perform the contract in question for a consideration of Rs.3.50 Crores, I deem it apposite to grant liberty to approach respondent No.1 with regard to his offer and it will be open for respondent No.1 to consider the offer made by the petitioner in accordance with the terms and conditions of the Request for Proposals.
With the aforesaid liberty, the writ petition is disposed of.
Sd/- JUDGE SS